July Figures Show Apparent Increase in Demand for Home Loans
Australian Bureau of Statistics (ABS) data for the month of July showed that demand for home loans increased at a rate that was greater than expected.
In July, 52,204 home loans were granted, a figure that increased from the 50,893 granted in June.
Ben Jarman, a JP Morgan economist, was mindful to point out that despite figures being stronger than anticipated, the increase has not been fuelled by first home buyers but by investors who generally take out larger loans.
Jarman noted that the size of the average loan is decreasing. He claimed that at as the activity today is more slanted towards investors as opposed to first-home buyers, there is less of an increase in overall credit growth that is achieved when new home-owners enter the market.
He also emphasised that while there seems to be a high level of turnover in housing, the growth is not genuinely stimulatory because an insufficient number of new homes are being built and there is a lack of credit growth.
CommSec Chief Economist, Craig James, believes that the housing market can be expected to make more gains because the federal election being over will create a more settled environment and help to raise the confidence of businesses and consumers.